The AI chipmaker
has signed a $20 billion deal to buy assets from artificial
intelligence startup Groq in an all-cash acquisition — its largest
purchase to date, according to aCNBCreport.
Inside Nvidia's biggest Christmas shopping spree ever to acquire Trump Jr-backed AI chip maker
Under the deal, Nvidia will buy Groq's every asset excluding its nascent Groq cloud business, which will continue to operate “without disruption”, the startup which makes AI accelerator chips said in a blog post, without giving the financial details of the transaction.
Nvidia has bought Groq's assets in a $20 billion deal, just ahead of Christmas(REUTERS)
In 2019, Jensen Huang's Nvidia bought Israeli chip designer Mellanox for a little less than $7 billion, making hat its biggest acquisition at the time.
Cut to now, the AI chipmaker has signed a $20 billion deal to buy assets from artificial intelligence startup Groq in an all-cash acquisition — its largest purchase to date, according to aCNBCreport.
Previosly, Nvidia had said it intended to invest up to $100 billion in OpenAI, but a formal deal has not been announced yet.
In its blog post, Groq said Nvidia will acquire its inference technology, for which both the companies have entered into a non-exclusive licensing agreement.
However, it did not disclose the transactional value of the deal.
Disruptive CEO Alexis Davis, who led Groq's latest financing round in September, told CNBC that the deal came together quickly.
Under the deets of the agreement, Groq founder and CEO Jonathan Ross and the company's president Sunny Madra along with other senior leaders will join Nvidia to “help advance and scale the licensed technology”, as per the blog post.
Nvidia is acquiring Groq's assets just three months after the AI startup raised $750 million at a valuation of around $6.9 billion from investors including
Alexis Davis, who has invested about half a billion since Groq's foundation in 2016, told CNBC that Nvidia is buying everything except the company's cloud business.
Groq in its blog post said “GroqCloud will continue to operate without interruption.”
It further said that Groq, even after the acquisition, will continue to operate as an independent company under finance officer Simon Edwards as CEO.
Why is Nvidia buying Groq
According to an email cited by CNBC from Nvidia CEO Jensen Huang to the company's employees, buying Groq will expand the AI chipmaking giant's capabilities. “We plan to integrate Groq’s low-latency processors into the NVIDIA AI factory architecture, extending the platform to serve an even broader range of AI inference and real-time workloads,” Huang wrote in the email, as per CNBC.
While Nvidia is adding Groq's senior leaders in its ranks and buying its IP, it is not “acquiring Groq as a company”, Huang said further.
The deal comes at a time when Nvidia had $60.6 billion in cash and short-term investments as of October, up from around $13 billion in 2023.
Other tech giants like Google, Meta and Amazon over the past few years have also made similar types of licensing deals to acquire top talent and technology from smaller AI firms.
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